Abstract

The objective of this project is to analyse the housing market in Ireland from 2010 to 2019 using strong visualisations to support our analysis. We will also offer house price predictions for 2020 through to 2022. In addtion we will conduct a more granular study of commuter and costal towns offering analysis of trends relating to this data. In the next section we will provide a general overview starting with a brief discussion about the recession, its effects and the aftermath. This will be followed by a look at changes in house prices over time at a regional level in Ireland.

Overview

The global economic crash of 2008 had a profound effect on the housing market in Ireland.[2] Ireland was severly hit becomming the first european country to offically enter recession status in september of 2008 and which lasted well into 2013 and which effectively brought to an end to what is colloquially refered to as the ‘Celtic Tiger’, a period of economic growth that originated in the early 1990’s.

One of the primary reasons the economy was so deeply effected was due to a property bubble which arose due to poor financial regulatory practices relating to lending and mortage policies by banks.[3]

To aid in our overview a Choropleth animation was created using data from the Ordinance Survey Ireland group.[4] The chloropleth animation shows the median property prices for each county for each year ranging from 2010 to 2019 (Fig. 1). A property in this context can mostly be defined as either an apartment or a house. Starting in 2010 we can see a continued decline in median property prices country wide up until 2013. At this point property prices for 11 counties had a median price of 90K or less. After 2013 propety prices in general begin to recover increasing year on year for most counties. A point of note is Dublin which has the greatest increase in median price and from 2017 on the surrounding counties of Meath, Kildare and Wicklow had median prices above 210K. By the end of 2019 Galway and Cork also went above the median price of 210K.

In general property prices appear to be increasing and further detail will be given in the following sections

Data Cleansing

Before data analysis commenced, the dataset was read-in and examined, and from this, we decided to remove redundant variables, and create a new column which contained only the year for each observation. Addresses and county names were converted to lower case for ease of screening and filtering, and symbols were removed from these variables. The price variable required removal of the euro symbol and commas, and new properties had their prices adjusted to include VAT - this was stored in a new variable ‘price_adj’. The dataset was checked for missing values (none present), and was examined for outliers. Approximately 5% of the dataset contained properties not at full market price, however we left these in in order to include them in our analysis. There were a number of low priced properties - we decided to keep these in as they could reflect ‘glorified cow sheds’, bedsits above a shop, or a very small plot of land (particularly during the recession when prices were at an all time low). Higher priced observations were looked at in more detail, with the majority identified as multi-unit properties. The final step in the data cleansing section involved splitting these properties into separate observations, each imputed with the mean adjusted price for that address. Observations greater than 10 million euros were removed as we felt that these most likely represented multi-unit properties rather than an individual property. There are a number of duplicates in the dataset, however some are genuine (the same property sold more than once), some are present as an artifact of splitting multi-unit properties, with the remainder as either genuine errors or multiple properties sold together under the one address. As there was no way of determining which were errors and which were genuine, we left them in. We felt the time cost of trying to extract the genuine errors from the data outbalanced the value of doing it.

House price change by region

Ireland can be divided into geographical regions, namely, North East, Eastern, South East, Southern, South West, Western, North West, Northern and the Midlands. For each region, four towns were selected ranging from urban or large towns (orange lines) to more rural (red < 10km from urban centre, blue < 30km and purple > 30km from urban centre). In general large towns, and towns within 10 km of these, tended to have the highest median house prices across all years and regions, with Strandhill in the North West being the most extreme case of these. Noticeable exceptions include Maynooth for the Eastern region, and Slane for the North East, where both towns exceed the median house price of the more urban areas. This could be explained in part by the fact that the proportion of houses to apartments increases further out from urban areas, with houses typically selling at a higher price than apartments. Slane lies between Navan and Drogheda so is probably a popular commuter town, as is Maynooth, which drives up house prices. The North showed very little differentiation between urban and more rural towns, and along with the midlands, had the lowest median house prices of all the regions. The Eastern region had the highest median house prices. As seen in the overview above, most towns saw a drop in median house prices from 2010 to 2012/2013, with the majority seeing a recovery and upwards trend in house prices from 2014 onwards.

Analysis of Dublin Commuter Belt

The Dublin commuter belt was originally an area of land beyond the M50 motorway where people who worked in the city would buy homes which were more affordable than the properties in the inner city. The Dublin commuter belt initially comprised towns such as Lucan and Swords. However, since the height of the housing bubble in the early 2000’s the Dublin commuter belt began to spread into the adjoining counties of Kildare and Meath until it’s halt was eventually precipitated by the 2008 housing collapse. The heat map below shows the median house and apartment prices in the period from 2010 to 2019 in the counties of Kildare and Meath. The heat map is illustrative of the sharp fall in property prices that was witnessed in the years from 2011 until 2013 followed by a resurgence in property prices from mid 2014 onwards. Property prices grew strongly from 2014 where the median price was €193,000 until the end of 2019 where the median price had risen to €268,722 in the Kildare, Meath areas.[5]

References

[1]
[2] https://en.wikipedia.org/wiki/Post-2008_Irish_economic_downturn
[3] https://en.wikipedia.org/wiki/Celtic_Tiger
[4] https://data.gov.ie/dataset/counties-osi-national-statutory-boundaries-generalised-20m/resource/b412ae22-ea13-4ca3-a8be-5ffc21f455f6
[5] https://www.irishtimes.com/business/economy/priced-out-home-buyers-drifting-to-dublin-s-commuter-belt-1.4104686